Delinquent Accounts on a Credit Report
In my last blog post I explained what a debt to income ratio was and how it affects a loan applicant in the 
qualification process for obtaining a mortgage. In my next series of posts I will lay out a plan to get out of debt so that you can breathe easier and start the process of purchasing a home.
The First step in getting out of debt is to:
Get current with all of your creditors.
Obtain a free copy of your credit report at annualcreditreport.com. You are entitled to a free report from each of the three repositories every year. Be careful with this. There are many ways to end up on some other website that wants to charge a fee to pull your credit report.
Also, to verify your identity, the site will ask you questions about yourself. Do not guess the answers to these questions if you don't know them off the top of your head. Please note that the answer can definitely be "none of the above."
If you do get locked out of the site the report will have to be requested by mail. *Please find that information below.
2. After you have obtained your credit report read through the entire thing. Highlight every account that is listed as past due, and not reporting correctly.
3. Make a list of all of the accounts that are past due.
- Note the dates. How old are these accounts? If they are less than 4 years old it could be worthwhile to consider settling these debts. If they are older and there isn't a possibility of the creditors obtaining a judgment for payment it might be best to leave them alone.
- If the debts are older than 7 years dispute the account with the credit agencies to have it removed from your credit report. Here is a link with instructions on how to do that written by the Federal Trade Commission: Dispute your credit report.
4. There are a couple of different options to take care of delinquent accounts on a credit report. I think that it is best to settle the account. To settle the account find the contact information at the back of the credit report or do an online search and contact the creditor directly.
- Creditors will oftentimes agree to settle for less than the amount owed and/or possibly remove it from your report. You have to call the company and see what they are willing to do. Before you pay any amount of money obtain a settlement payoff statement from the creditor stating that the account will be paid in full after the payment has been received. Keep all proof that you paid off the account in a file in case it shows up on your credit report again.
- If the account is recent and the creditor will not settle try to work out a payment plan with the creditor. Your goal should be to pay this account off as quickly as possible. It might be worthwhile to save enough money on your own and try to get them to settle for less than the amount you owe.
In my next blog post I will explain the next step you should take to get out of debt and get on track for home ownership.
*Request your Credit Report by Mail:
- Download the request form (You need an Adobe viewer to view the requested form. Download the free Adobe viewer)
- Print and complete the form
- Mail the completed form to:
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
To Request your Credit Report by Phone:
- Call 1-877-322-8228
- You will go through a simple verification process over the phone.
Please call me at 406-890-6070 if you get stuck and need me to walk you through this step or have questions!
Elisha Grace - Loan Officer at Mann Mortgage, LLC
License: MT #175844 WY #084 ID #11627
Delinquent Accounts on a Credit Report
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